There was a Street trade at 901/4 late last week of a $5 million chunk of Owens Illinois' revolver. While levels are up, dealers say they have topped off due to bank pressure. "A lot of banks have oversized positions and will sell down," said a dealer. Another commented, "It feels like the bank pressure is at the 90 to 92 level. There's just lots of potential supply."
Earlier this year the bank debt traded at 92-93, with some dealers expecting it to climb higher as a restructured bank deal that would be asset-backed was expected to improve banks' positions. Meanwhile, other asbestos-related companies are also trading up. A chunk of Crown Cork & Seal traded at 85. "Asbestos is not viewed as the bottomless pit it once was," said a dealer. "I think people are just realizing the potential liability isn't the geometric explosion they thought it was. When the first two dominoes fell, everything fell. Asbestos companies were lumped together."
Owens-Illinois has a $7 billion deal with Bankers Trust Company, Bank of Nova Scotia, BancAmerica and NationsBanc Montgomery Securities that breaks down into two tranches. Pricing is LIBOR plus 1%.